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Theory of Games and Economic Behavior by John Von Neumann - Exam
  • 1. Which of the following is a type of game that has a clear conflict of interest?
A) Zero-sum game.
B) Cooperative game.
C) Public goods game.
D) Evolutionary game.
  • 2. Who are the authors of the book 'Theory of Games and Economic Behavior'?
A) John Von Neumann and Oskar Morgenstern.
B) Kenneth Arrow and George Stigler.
C) John Nash and Roger Myerson.
D) Daniel Kahneman and Amos Tversky.
  • 3. In cooperative games, what is the core?
A) A stable outcome without any external enforcement.
B) The basic strategy that guarantees a win.
C) An allocation accepted by all players without negotiation.
D) The set of feasible allocations that cannot be improved upon by any coalition.
  • 4. What does ‘best response’ mean in game theory?
A) The most conservative choice.
B) The strategy that ensures a win every time.
C) Any strategy that players prefer.
D) The strategy that yields the highest payoff given the other players' strategies.
  • 5. What is a 'Pareto efficient' outcome?
A) An outcome where players always get equal benefits.
B) A game that always ends in a tie.
C) An optimal outcome only for one player.
D) An allocation where no player can be made better off without making another player worse off.
  • 6. Who introduced the concept of game theory in economics?
A) Adam Smith.
B) Milton Friedman.
C) David Ricardo.
D) John Von Neumann.
  • 7. What does 'subgame perfect equilibrium' refer to?
A) An outcome determined by chance.
B) A situation where players cannot change their strategies.
C) An equilibrium that exists only in finite games.
D) An equilibrium where players' strategies are optimal in every subgame.
  • 8. What is a strictly dominated strategy?
A) A strategy that is better in some cases and worse in others.
B) A strategy that is worse than another strategy for every possible action of the other players.
C) A strategy that cannot be improved upon.
D) A strategy that is randomly chosen.
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